the global markets react to the u.s. crackdown on china the barriers to chinese exports are supposed to protect american security and jobs but investors are seeing the start of a trade war. and this trendy watch company in detroit is key for the city's economic revival but it can't do without parts from you guessed it china. and some for business on the w m how you got to guess welcome to the program china said it is preparing tariffs on american imports in response to u.s. penalties on steel and aluminum the take effect today chinese officials vowed to defend against an even larger number of tariffs signed by president donald trump global markets are already worried china could hit everything from american pork and apples to steel pipes its commerce ministry said it encouraged trump to

negotiate but gave no deadline trump has demanded reciprocity in trade and is threatening tariffs on up to sixty three arab misjudge the situation and underestimate our ability to defend our legitimate interests they've also underestimated the price they'll have to pay for their reckless behaviors. business leaders are warning that a full scale trade war would not benefit either side. the response from our members has been one of concern that these actions could lead to a trade war which is something that nobody wants to see at the same time it's important to recognize that there has been a growing sense of frustration within the business community about the lack of progress and market access openings in china's increasing use of industrial policies the markets are already worried with global stocks taking a tumble on friday. some commentators see beijing's response to president trump's latest terror plans as relatively measured but washington is hinting that more

punitive measures on trade may be on the horizon. all right let's go over to new york at the new york stock exchange where our financial correspondent caught to has been following this story for us yes what a week it has been we know that there are mixed views about these tariffs in general but the markets are in the red do you think this is just a short term reaction or fears that a long term negative effect could be on the way. it really depends how this whole trade war will actually work will it be a verbal threats or will we really see some serious action so far when we look at china for example they're not having a terror of on big ticket i could from the u.s. like soybeans or crafts from boeing about that could change and then also there has been word on friday that china is at least is keeping the option open to stop

buying u.s. treasuries and overall the sell off continued here on wall street after the dow jones industrial average lost seven hundred twenty points on thursday we dropped by another good four hundred twenty points on friday so no happy ending here on wall street for this turbulent week. just mention one of the key points of the possibility of china slowing down the purchase of u.s. treasury we know that china is america's most important international creditor what effect could this have if they actually decide to do so. that could have further huge implications china right now is sitting roughly on one point two trillion dollars in u.s. treasuries that as you mentioned was that it's the biggest foreign creditor to the u.s. but if we look ahead the us is running a huge deficit and that's a rather likely to increase especially with the tax cuts that the new and as the

administration just implemented so the u.s. depends on foreign buyers to keep buying a u.s. treasuries and if china would stop doing so that could have huge implications on the financial markets and also for the economic growth overall until then we will just be thankful that it's friday thank you very much for the analysis and for reports throughout the week. now the worse case scenario of this tariff conflict that's remind everyone would be a trade war were all global economy start imposing levies on each other however it's important to remember that trump is doing this as a retaliation for what he and many others consider unfair trade practices from china needless to say it's a controversial topic. if you thought it was just a spat between the u.s. and china think again the contagion from trump's tariffs will reach european shores

weighing on global trade as a whole so say germany's economic representatives. thus the stuff that's in to what's happening is extremely dangerous because everything's connected to everything else you will be hit if china can't send its goods to america. as if this country there are only losers in this game there's only one better solution from the view of the german economy even if it's difficult to negotiate. trump's critical stance against chinese industry is nothing new europe has also long complained about the country's business practices. of course we have a problem we have been forced to technology transfer in china we know there are companies are on the strong pressure to share innovation to share the results of the research and we have a trust in the past the think that terrorists are not the right instrument to deal

with this. germany is now at the negotiating table to avoid steel tariffs against the e.u. in the long run could trump's latest move simply be brinkmanship to make china do the same. the business and trade associations at the heart of europe's biggest economy say that trump is perhaps right to take some sort of action against china but that the measures he's announced are going too far even if china doesn't step up the retaliation trump could be handing them the chance to be seen as the new protectors of global free trade. now as you just heard the e.u. has been temporarily accepted from the u.s. tariffs on steel that's good news for the industry but experts warn the tariff conflict could be far from over germany's top steel companies are assessing the risks knowing that they're dealing with a commander in chief in the u.s. that is impossible to predict. it's the early shift to some crips steelworks and there's just one topic of conversation for those clocking in the preliminary

agreement about the u.s. steel tariffs. we don't really believe it we know donald trump always goes back and forth with things kind of he gets not a proper settlement as donald trump has clearly had so much pressure from within his own country for trouble from the federal reserve banks and the u.s. economy via chaffed. exports around four billion euros worth of products to the u.s. every year industrial facilities machines and steel high quality high tech steel. the german state association has welcomed the agreement with the u.s. government but it says the e.u. is far from being in the clear the u.s. will still be sealed off for many of the steel exporting nations from eastern europe and asia their exports may well end up on e.u. markets. and we believe that that could mean around thirteen million tons is being

diverted to a. form that's an import increase of fourteen percent which would completely swamp european steel markets some place considerable pressure on companies to adapt and possibly because it donald trump still disputes has changed the way many workers at towson crip see the us and has done a lot of damage at least as far as trust is concerned. and speaking of damage tariffs on u.s. imports could also backfire for american companies for example this firm we visited in detroit it relies heavily on parts from other countries slapping them with levees would not only threaten the success of the business but also the city of detroit's way out of crisis. detroit the motor city known for its manufacturing and innovative spirit. tunisia hubbard works on the assembly line at the shrine all the factory building watches before this job she work on another

assembly line in the auto industry she thinks her job which i know is a step up from the old one she's grown and has more opportunities here the difference between. a and b. . and the difference with this is the five of the products that we get time to concentration that we hear. a little bit more detail. but our shine all the watches really made in america claiming that can be misleading considering that the company's parts are sourced from around the world. the movement components come from a swiss company with a factory in thailand shine all also outsources other components like cases hands dials and crystals from india china and taiwan they even buy their thread from a supplier in germany so technically their watches are not really made in america

but she knows management says it's more about the american jobs it creates the company started out with just six employees now it has a workforce of six hundred fifty with around two hundred fifty of them working on the assembly line the company invests heavily in its employees even flying in watchmakers from switzerland to train them courtney whiting or assembles bicycles that china has detroit showroom. he's convinced china all the plays an important role in the city's economic revival. death by. four years the story's been open and there was not much on the street preachers know their stuff but all the time it's just a plain old photo resurgence of friends coming back. one thing is for sure. all the creates are made in america and they help detroit's economy one watch and one bicycle at a time. that was

a business for more. all of us on twitter or facebook thanks watch until next at. the.

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